Why I now support a second referendum on Brexit

I have spent the last two years rolling my eyes at people’s calls for a second referendum on Brexit. I thought it was impossible, and diverted Remainers’ energies away from shaping the Brexit settlement, making a hard or no deal Brexit more likely.

I now think that I was wrong, and a second referendum is both possible and desirable.

During the referendum campaign, while I was Executive Director of the Adam Smith Institute, it was clear to me that leaving the single market suddenly would be a disaster. I favoured “Liberal Leave” for a time, mostly on the basis that the UK and the EU often had quite incompatible visions of the future, and it would be better to be friendly neighbours than noisy lodgers.

In the end, I decided that most Leaver voters were more interested in things like ending Freedom of Movement and achieving full domestic control over regulation that necessitated leaving the single market, and which I either didn’t care about or actively opposed. I am very pro-immigration, and I care about prosperity through any means — if domestic control meant we became a less open economy and society, I wouldn’t want it. I think my pre-referendum post on Leave has mostly turned out to be right, and I’m glad I voted to Remain.

Since the announcement of the Withdrawal Agreement and Jo Johnson’s resignation, it has begun to look much more likely that a second referendum might happen. As Stephen Bush points out, Sam Gyimah’s support now means that there may be a Parliamentary majority for a second referendum, after May’s deal fails, even if the government would need to go along with it too.

These are the main reasons why I think a second referendum would be a good thing. The point of this post is to explain which arguments have swayed me, not to try to prove that I am right. I don’t expect this to change anyone’s minds, except perhaps the few people who share my basic outlook on the world and are wavering about what should happen next.

It may be that or no deal

It’s possible that lots of MPs opposed to the Agreement will change their minds after it fails the first time round, but the only changes that seem likely after the first vote are cosmetic ones. In that case, we might end up in a scenario where the choices are this deal, an extension of Article 50, or no deal.

Norway/EEA seems like a non-starter. It has at least the perception of having most of the same things that make the Withdrawal Agreement so unpopular, like being a rule-taker with no real say, but with the addition of Freedom of Movement. The “Norway for now” idea seems delusional now — neither EFTA nor the EU have any incentive to allow us to park ourselves temporarily in the EEA. Similarly, the EU has no incentive to allow the UK to extend Article 50 without having a very good reason to do so.

No deal, then, seems quite possible. I agree with the mainstream view that this would be very bad, and the responses to the Treasury’s model, which projects a huge hit to the economy under no deal, have been weak. The best case scenarios I have heard about this, from free marketeers, all involve the government having an overnight conversion to the benefits of open trade and markets. If that was possible, we wouldn’t be where we are now.

It seems to me that it is very hard for any option to win majority support in Parliament. The advantage of a referendum is that it solves that problem, and would probably be enough to get an Article 50 extension from the EU for.

The Withdrawal Agreement puts the UK on a path of decline

I’ve felt genuinely open-minded about the Withdrawal Agreement over the past few weeks. Some aspects of it are fine by me — the obsession with the Northern Irish backstop seems silly to me, and I simply can’t get worked up about the prospect of customs checks on large shipments of goods between Northern Ireland and Britain.

I do fear the prospect of the UK being locked in the Withdrawal phase for years against its will, maybe as long as decade judging by the time it has taken for similar deals to be negotiated, and what that will do to politics in the UK. I detest the fact that restricting immigration has been the UK’s overriding priority in the Agreement, and fear that, if it passes, the government will have an incentive to go harder and harder on immigration to signal to Leavers that they have achieved a “true” Brexit.

Most of all, though, I just don’t see the point. This isn’t a deal that’s going to lead the UK down a path of deregulation, tax cuts, or unilateral free trade — not that these were ever likely outcomes from Brexit anyway. It improves nothing. Unless you really, really dislike Spanish and Polish people coming to the UK, there is nothing in this deal that improves on EU membership. It doesn’t settle the issue of Brexit — far from allowing us to move on and regain some national sanity, it makes Brexit the political dividing line for the next decade, at least. No thanks.

Theresa May must not succeed

Theresa May is the most illiberal, anti-market Prime Minister the UK has had since at least the 1970s. She seems obsessed with cutting immigration. Her government is pushing through unprecedented new powers to allow the politicians to block or intervene in takeovers of British firms that might come with unpopular job cuts or factory closures. She has brought in price caps in energy instead of doing anything to make the market more competitive or consumer-friendly. Her government cannot stop banning things as trivial as plastic straws, on ludicrously thin evidence that doing so provides any benefit to anyone anywhere.

If her Withdrawal Agreement passes, there is a serious danger that she is emboldened and strengthened enough to keep on pushing her agenda. She will probably try to lead the Conservatives into the next election, and that is much more likely if she is seen as successfully delivering a Brexit withdrawl agreement, even it stinks. Even if they do get rid of her, the longer she leads the Conservatives, the more her dirigisme and paternalism seep through government and what’s left of the liberal right.

There are more important things than “respecting the result”

I see why it’s annoying to Leavers to face a repeat of a referendum they won. It would be infuriating to lose it. But I’m unpersuaded by supposedly principled arguments that we must push on with Brexit no matter what. Many people may have voted to Leave with a different outcome to this one in mind. Asking them to decide if they’re absolutely certain that they want to go ahead with this is not, to my mind, a huge crime, and I doubt many Leavers, had they been on the losing side, would have objected to a second referendum if they’d been able to get one. (Indeed I remember many discussing how to get that, during the referendum campaign when it looked as if they’d lose the first one.)

There are more important things to think about, like giving people better lives and more opportunities for their children. To claim that we should “respect the result” even if it trashes people’s livelihoods and impoverishes the country is fanaticism. We don’t have referendums on interest rates, and if for some stupid reason we did and people voted to raise them to 20%, we should ignore the result.

Maybe there would be a political backlash if we voted to Remain from the losing Leave side. That would be understandable and regrettable. But there is already a stab-in-the-back myth brewing about Brexit among some Leavers — this isn’t “real” Brexit, and so on. Maybe the people who ran sinister adverts about Mark Carney being a Goldman Sachs stooge are just prone to that kind of thinking.

Consider instead the consequences if we get Brexit and it is just as bad as it looks like it will be. I suspect people overweight the political costs of stopping Brexit, and underweight the economic and political costs of going ahead with it. More than a UKIP 2.0 in a second referendum scenario, I’m worried about the combination of a deep post-Brexit recession and a Labour Party led by Jeremy Corbyn.

Right now we are about as rich, per person, as France. With the right economic reforms we could be perhaps as rich as Germany. After Brexit, our long-term living standards are likely to trend towards Italy’s. Italy is a fine country, but it’s not what I want Britain to be — especially without the weather.

Most Britons are not xenophobes, but they are not free market liberals either. The Brexit they voted for will make us less open to the world around us. We will be poorer as a result. Without the checks and balances that the EU, for all its faults, provided, politicians will be free to nationalise more industries and keep out more talented migrants from abroad.

Everything that has happened in the subsequent 14 months has made this more likely. As much as I like and respect most of the free marketeers that see Brexit as a major victory, I think they’re kidding themselves about what Brexit is going to involve. There is no prospect of Britain becoming a deregulating Singapore-on-Thames: countries do not “default” to free market policies when things get rough, they just get poorer and poorer and poorer.

One of the advantages of no longer leading a prominent think tank are that I can change my mind freely and easily, and not worry about how that reflects on anyone else. These are my views alone, and although I’m slightly embarrassed to have been so dismissive of pro-second referendum arguments in the past, changing your mind is good mental exercise.

I don’t know what happens next. I’m least sure about the actual politics of this happening. I also have no idea what I could do, as a private citizen, to move the dial in the direction I want. The thought of taking part in a march is nauseating enough, let alone a march for a “People’s” anything. But I hope, if you are someone who thinks the same way I did until a few weeks ago, you will take a few minutes to reconsider too.